Successful Performance Management – Exploit Opportunities, Understand Obstacles

According to a March 2007 survey of large organizations across multiple industries, conducted by BusinessWeek Research Services in partnership with SAS, achieving top strategic goals in increased sales, higher profits and a deeper understanding of customers, depends on a successful implementation of performance management (PM). The results of this study prove that PM, done right, does have a big payoff. Companies that have excelled at performance management are more likely to enjoy an enhanced understanding of their customers and their marketing initiatives, leading to better products and services and increased profitability. As a part of the research program, key points that companies must understand to overcome the obstacles and exploit the opportunities were identified. A few are listed below:

– Performance Management propels top-line and bottom-line growth. The first wave of PM slashed costs by improving business processes and streamlining infrastructure. As C-level executives look to balance top-line and bottom-line growth over the next few years, they also expect PM initiatives to boost revenues. Their mantra: “profitable growth. Performance Management requires a culture of accountability. Developing such corporate culture involves three steps:

1. Set clear goals.
2. Develop scorecards for all employees that provide date at least once a month on key performance indicators (KPIs).
3. Give incentives for performance through promotions, compensation and performance ratings.

- CEO’s want to respond faster to opportunities and threats. Agility means getting the right data to the right decision maker at the right time. PM systems with out predictive analytics support are just a rear-view mirror, which doesn’t help CEO’s drive their companies forward.

- C-level execs acknowledge they own many of the obstacles to PM success. At the top of the list; a lack of collaboration, a poorly articulated strategy and a lack of visibility into causes and effects.

In conclusion. PM is not a substitute for good decision making, but it can drive revenues and net income if properly considered and implemented throughout all levels of the organization.

contributed by Deborah LeBaker

Spotlight: Trust - Transactional or Relational?

Trust is an important element in any successful business activity. Based on a series of conversations with Executives I have come to find that Trust as a term is stretched in many directions to mean different things for many people.

Listening to Executives share the stories about how they are the Trusted Provider or the Trusted Partner sounds very powerful. Yet as I listen there appears to be a fundamental disctinction about Trust, one that could establish two basic types of Trust in the business world.

Transactional Trust is typically based on Process or Products. Does the activity or object do what it is expected to do? This is sort of the ante to play in any game. In this model the activity is reduced to economics, timing, quality, and availability. If your processes are not reliable and your products don't work you are out of the game.

To improve performance in this area you would invest in manfuacturing engineering, service delivery, process and tools, quality management, systems, and personnel. Transactional Trust can be demonstrated by being flexible, responsive, customer focused, delivery oriented, economically competitve, and more.

Relational Trust on the other hand is between People. This is never a given and typically is built over time, and can be lost very quickly. To make it stronger invest in account management architectures, customer satisfaction and loyalty programs, cross teaming recognition and awards, and more. You can demonstrate it by being more open, at times even vulnerable, be willing to share gains/risk, and always deliver on your personal commitments.

The opportunity is to build relationships that can weather the transactional storms. Select the ones that make sense. You simply can't treat them all the best. Or can you? How do your clients view your company - transactionally or as a trusted relationship?

contributed by Peter Pazmany

Industry Trends - IT Cost Cutting

In a recent survey conducted by CIO Insight companies polled seek to cut their IT costs but want to make progress in creating strategic applications and improving existing ones. While this finding may seem incongruous, it speaks to their willingness to seek out service and solution providers to augment their strategies. Further drilling into the data identifies which five technologies will make the most significant contribution to those company’s business strategies in 2007.

• Business intelligence/data mining - 37%
• Business process management - 34%
• Web services/service-oriented architecture - 32%
• Collaboration and work flow - 31%
• Data and systems integration - 27%

Each of these areas target specific types of improvements. Web services are about lowering infrastructure and IT start-up cost in order to gain immediate access to enterprise level software solutions. Where as business intelligence and data mining are about increasing the harvest of information from pools of data being collected in order to increase traction with customers to grow revenues, increase satisfaction, and cut cost.

The business process management and the collaboration work flow share similar desired outcomes, in that they seek streamlining, integration, and automation of activities in order to create predictable, sustainable and scalable solutions. Finally, the data and systems integration will be a perpetual challenge because there will always be pools of data or systems that run astray of the total integration. Whether it is from an acquisition or through decentralization into geographies, business units, or disciplines, data and systems will continue to co-exist heterogenously.

The time to set the wheels in motion to accomplish these initiatives is now. Each of these technologies will require companies to rely on external resources in order to fine tune their strategic plans and tactical execution. Building relationships is imperative in meeting these goals and objectives. Select Partners that can help you implement change successfully. Don't underestimate the People factor in achieving your objective, so make sure to include resources to manage said change to ensure that it sticks, gains traction, and accelerated into a new future.

contributed by Michael Singleton